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Bonneville Power, 2 utilities agree to 6% cut in costs

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Bonneville Power Administration, the biggest power seller in the U.S. Northwest, said Tuesday that an agreement with PacifiCorp and Puget Energy Inc. will cut the federal agency's costs by 6 percent, or $200 million.

Bonneville supplies power at cost from federal hydroelectric dams. The reductions may decrease the agency's wholesale power prices through 2006, said Ed Mosey, a Bonneville spokesman. The agency will determine in October how much power prices under contracts with utilities should rise or fall, depending largely upon electricity sales this summer.

"Our reservoirs are at just over 80 percent of capacity, so we may not get enough secondary power sales to pass all the cost savings on to customers," Mosey said.

PacifiCorp, a unit of ScottishPower Plc, and Puget's Puget Sound Energy, agreed to forgo $100 million that Bonneville owes in lieu of supplying electricity to the utilities. They also agreed to defer $100 million until 2007, when the contract would expire.

In return, PacifiCorp, Puget Sound and other investor-owned power companies in the region will continue to get power supplies or payments from Bonneville through 2011.